APCs Insider, September 5, 2008

QUESTION: Is it inappropriate to bill all self-administered drug (SAD) charges as integral to a procedure using revenue code 250, or should we bill the SADs to the patient using revenue code 637? Is this the hospital's choice?

ANSWER: Consider the following guidelines when billing SADs to Medicare. (Note that SAD guidelines apply to outpatients only, so the following answer applies to outpatients and also includes Part B only claims.)

You should assign revenue code 637 to SADs to differentiate them from drugs covered under revenue code 250. You can assign a SAD to revenue code 250 and still place it in the non-covered column of the UB-04; however, since most billing rules are specific for revenue codes, this practice creates a large potential for error. Note that some FIs/MACs have stated that facilities must report SADs under revenue code 637. More importantly, you should designate a SAD separately from other drugs integral to a procedure. It is inappropriate to disregard this practice.

Typically, providers use revenue codes to assign responsibility to the patient or payer. The claim editing dictionary in your billing software determines how to assign a particular item. It may be possible to set up an item?s charge code in the dictionary to reflect either facility or patient responsibility. This means that an item could have either revenue code 250 or 637 assigned in the Charge Description Master. Then, when you assign responsibility at the charge code level in the claim dictionary, you could assign it to the patient. Each provider should evaluate their individual system?s capability.

Neither the OPPS nor other Medicare payments rules regulate the provision or billing by hospitals of noncovered drugs to Medicare beneficiaries. However, a hospital's decision not to bill the beneficiary for noncovered drugs potentially implicates other statutory and regulatory provisions, including the prohibition on inducement to beneficiaries, section 1128A(a)(5) of the Act, or the anti-kickback statute, section 1128B(b) of the Act. Providers are encouraged to familiarize themselves with the specific provisions cited in these Acts in order to ensure compliance.

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